Which of the following statements is normative?
A. Large budget deficits should be avoided.
B. When the Federal Reserve increases the money supply, interest rates decrease.
C. High taxes tend to decrease saving.
D. A large budget surplus is likely to lower interest rates.
Answer: A
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The difference between consumption and capital goods is that
A) only big corporations can afford capital goods. B) capital goods are used to produce additional goods while consumption goods are not. C) capital goods are provided by the government. D) consumption goods can be enjoyed by many people at the same time. E) it is illegal to export capital goods.
If the market in the figure above is a profit-maximizing single-price monopoly, consumer surplus is the area ________
A) ABH B) BFGH C) ACG D) BCD E) ACE
The smaller the currency drain, the
A) smaller the increase in the quantity of money from an increase in reserves. B) more likely it is that the banking system will hold a larger proportion of excess reserves. C) the smaller the effect of a change in the discount rate. D) larger the increase in the quantity of money from an increase in reserves.
If receipts of factor income from the rest of the world exceed payments of factor income to the rest of the world, then
A. GDP equals GNP. B. GNP equals NNP. C. GNP is greater than GDP. D. GDP is greater than GNP.